A Complete Guide to Section 154 of Income Tax Act: Rectification of Mistakes in ITR
Filing your Income Tax Return (ITR) accurately is crucial, but what if you or the Income Tax Department spot an error after processing? That’s where Section 154 of Income Tax Act comes into play. This provision empowers taxpayers and the Assessing Officer (AO) to correct mistakes in income tax records, ensuring fair and error-free assessments.
This article explains Section 154 in simple terms, covering who can apply, what qualifies as a rectifiable mistake, how to file, and what to expect during the process.
What Is Section 154 of the Income Tax Act?
Section 154 allows for rectification of mistakes that are apparent from the record in any income tax order, intimation, or assessment. Both taxpayers and tax authorities can initiate this rectification request.
The objective is to correct genuine errors like miscalculations, data entry mistakes, or overlooked claims without needing a lengthy appeal or review.
Examples of Mistakes That Can Be Rectified Under Section 154
Rectifiable mistakes must be clear, self-evident, and not debatable. Examples include:
- Mathematical errors in the assessment order
- Incorrect credit of TDS or advance tax
- Non-consideration of Form 26AS or AIS data
- Clerical errors in names, PAN, etc.
- Disallowance of a deduction or exemption claimed but supported by valid documentation
Who Can File a Rectification Request?
The following parties can request rectification:
- Taxpayer (Assessee):
If you notice an error in your processed ITR or intimation under Section 143(1), you can file a rectification request. - Assessing Officer (AO):
The AO may also initiate rectification if they identify a mistake while reviewing tax records.
Which Orders Can Be Rectified Under Section 154?
Rectification is possible for the following:
- Intimation under Section 143(1)
- Orders passed under Sections 147, 153A, or 154
- Orders passed by CIT (Appeals) or ITAT, if mistake is apparent from the record
Time Limit to File Rectification Under Section 154
- The time limit to file a rectification is 4 years from the end of the financial year in which the order sought to be amended was passed.
- However, there’s no time limit for correcting a clerical or factual error if it’s initiated by the Assessing Officer.
How to File a Rectification Request Online?
Step-by-Step Process:
- Login to the Income Tax e-Filing portal.
- Navigate to: Services > Rectification > New Request
- Select the appropriate Assessment Year and Order Type (e.g., 143(1) Intimation).
- Choose the reason: “Return data correction,” “Tax credit mismatch,” etc.
- Upload supporting documents, if applicable.
- Submit the request and note the acknowledgement number for tracking.
What Happens After Filing a Rectification?
- The request is reviewed by CPC or the Assessing Officer, depending on the type of order.
- If accepted, a revised intimation/order is issued.
- If rejected, reasons will be shared. You may file an appeal if you disagree.
Rectification vs. Revised Return: What’s the Difference?
| Criteria | Rectification (Section 154) | Revised Return (Section 139(5)) |
| Purpose | Correction of errors in processed return | Correction of errors in filed return |
| Filing Time | Within 4 years of the order | Before end of assessment year |
| Scope of Correction | Only apparent mistakes | Broader changes allowed |
| Who Can File | Assessee or AO | Only Assessee |
Important Tips for Filing a Rectification
- Always match your ITR with Form 26AS and AIS before filing.
- Keep all supporting documents handy and ensure clarity in your response.
- Double-check if your issue is eligible under Section 154 and not something requiring a revised return or appeal.
Frequently Asked Questions (FAQs)
- What is the time limit to file a rectification under Section 154?
You must file it within 4 years from the end of the financial year in which the original order was passed. - Can I file a rectification request more than once for the same assessment year?
Yes, if there is a new mistake found or the previous issue wasn’t resolved correctly. - How long does it take to process a rectification?
Typically, it takes 15–45 days, depending on the complexity and CPC workload. - Can I revise my return after filing a rectification?
No. Once a rectification is filed, you cannot file a revised return for that assessment year. - Can I check the status of my rectification request?
Yes. Log in to the e-Filing portal and go to “View Filed Requests” under Services. - Will I get a refund if my rectification request is approved?
If the rectification leads to excess tax paid, a refund will be issued accordingly. - Can the AO reject my rectification request?
Yes, if the issue is not apparent from the record or lacks proper documentation. - Is there any fee for filing a rectification?
No. Filing a rectification request under Section 154 is free of charge. - Can rectification be filed for mistakes made by the Income Tax Department?
Yes. Section 154 allows correction of mistakes made by either the assessee or the department. - Is legal representation required for rectification?
Not mandatory, but it’s advisable to consult a tax professional if the matter is technical or complex.
CA Madhusmita Padal is a Practicing Chartered Accountant with firms based in Odisha and Chennai. She specializes in taxation, company law, and auditing. She is passionate about simplifying complex concepts and making knowledge accessible to all.
